60 Minutes' Case Part of a Trend of Corporate Pressure, Some AnalystsSay

By WILLIAM GLABERSON

Published: November 17, 1995

For years, news media analysts have warned that aggressive news coverage was in danger as newspapers and networks came under the control of ever-larger companies facing increasing pressure to please their investors.

Nothing has thrust that onto the national stage like the recent image of "60 Minutes" and Mike Wallace being overpowered by the fears of CBS lawyers of a theoretical lawsuit had the CBS broadcast an interview with a tobacco-industry whistle-blower.

But the "60 Minutes" incident is only the latest sign that news organizations may be backing away from a longtime principle: that the best way to ward off challenges to news coverage is to fight rigorously each and every one, particularly if it is high profile.

Many news organizations have recently taken actions that some analysts criticize as capitulation. Those organizations include many of the country's blue-chip news names: ABC, NBC, CNN, Business Week and The International Herald Tribune, which is owned by the New York Times Company and the Washington Post Company.

"The press lawyers have lost sight of the fact that for press freedom to exist, it's a continuous, constant fight," said James C. Goodale, an expert on the First Amendment who was general counsel to The New York Times when the newspaper published the Pentagon Papers.

Henry R. Kaufman, the general counsel to the Libel Defense Resource Center, a support center for the news media that receives financing from most of the country's largest news organizations, said: "Once, there was a view that staunch defense was always the better way to go. There is some slippage in that view."

Changing Views On News Media

There are many explanations for what many see as the shift in philosophy. Public attitudes have soured against the news media. In the last 15 years or so, the courts have grown more hostile to news organizations, refusing to extend the boundaries of the press's legal protections.

Lawyers' fees have also ballooned so rapidly that defending a well-financed suit against a news organization can cost millions of dollars.

In a notable incident, ABC apologized to Philip Morris this summer as part of a settlement of a defamation suit in which the tobacco company claimed that the network had wrongly reported that the company "spiked" its cigarettes with nicotine.

ABC's settlement came over the protest of the journalists who prepared the broadcast. The network has never disclosed the terms of the settlement, but lawyers familiar with the case said ABC also agreed to pay at least $2.5 million in lawyers fees to Philip Morris. That amount would put it nearly on a par with the largest libel award ever paid by a news organization, $3.05 million, by the CBS television station in Chicago after a suit by another tobacco company, according to the Libel Defense Resource Center.

The CBS lawyers in the "60 Minutes" case have indicated, however, that they did not fear a libel action but one by the tobacco company asserting that the network had wrongfully interfered with the company's contract with the former executive promising his silence about company affairs. A suit based on that legal theory of "tortious interference" led to a $10.5 billion verdict against Texaco Inc. for trying to break up a merger deal between the Pennzoil Company and Getty Oil, and that verdict ultimately led to Texaco's filing for bankruptcy protection in 1987.

The more cautious climate may be shaped in part by several large-scale libel cases that exposed the tactics of journalists who prefer to be the scrutinizers, not the scrutinized. Journalists were, in effect, put on trial in libel suits like that of Gen. William C. Westmoreland against CBS in 1985, in Israeli General Ariel Sharon's case against Time magazine in 1986 and in the psychoanalyst Jeffrey Masson's more recent suit against Janet Malcom of the New Yorker magazine. Increasing Pressure From Business Side

But some journalists and lawyers for the news media said this week that perhaps the biggest change in recent years was increased business pressures on news rooms. Those pressures, once forecast by journalists concerned over potential conflicts, have changed the environment in which decisions about controversial news coverage are made.

"In a lot of situations, it's not news people or lawyers with First Amendment values -- or journalism values -- who are making these judgments," said Rodney A. Smolla, a specialist on the First Amendment at the College of William and Mary.

In recent years, control of the general counsel's office at many of the country's largest news media companies has shifted from lawyers who specialize in First Amendment law to lawyers whose a background is in corporate law or finance. At Time Inc., which is now searching for a new general counsel, the general counsel reports to the chief financial officer. At CBS, the general counsel, Ellen Oran Kaden, is a former corporate litigator who is not known as a First Amendment specialist. CBS has its own lawyers who specialize in First Amendment issues, but Ms. Kaden, as the chief CBS lawyer, played a central role in advising corporate executives about the dangers she saw presented in the "60 Minutes" situation.